I am getting a migraine wrapping my head around the following, read it, and tell me if you agree or disagree with the rationale in the second paragraph:
According to comScore, in May 2007, in the US, 126M Unique Video Streamers Watch 7B Videos, yet if online video ads will become a $4.3 Billion market by 2011, this implies, at $20 CPM, that we will need 215B ad pre-rolls… and if we continue to see 1 ad for every 3 video content, then we will need 645B content streams.
Clearly, video advertising will involve far more than pre-rolls, but this simple example illustrates why there will be more demand than there will be supply of quality content, and this will drive up advertising rates and asset values of professional video.
The first part is simple math. The second part could go either way, either there will be probably not be enough viewers to soak up the ad demand or the advertising will flow to lower quality inventory, such as UGC etc. But either way, the ad dollars will flow to larger sites, stronger brands and premium content, no?
Any thoughts?
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August 15th, 2007 at 2:15 pm
Sounds ok but what does it cost to make a high quality video that takes about 2 minutes to play?
P.S.: I’m not asking you to disclose that kind of information.